WIPRO 2019-20 Annual Report Analysis

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WIPRO 2019-20 Annual Report Analysis
Mon, 14 Dec

WIPRO has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

WIPRO Income Statement Analysis

  • Operating income during the year rose 4.2% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 6.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 20.2% in FY20 as against 19.8% in FY19.
  • Depreciation charges increased by 7.1% and finance costs decreased by 0.6% YoY, respectively.
  • Other income grew by 4.3% YoY.
  • Net profit for the year grew by 8.4% YoY.
  • Net profit margins during the year grew from 14.7% in FY19 to 15.3% in FY20.

WIPRO Income Statement 2019-20

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Net Sales Rs m 585,845 610,232 4.2%
Other income Rs m 26,138 27,250 4.3%
Total Revenues Rs m 611,983 637,482 4.2%
Gross profit Rs m 116,126 123,452 6.3%
Depreciation Rs m 19,467 20,855 7.1%
Interest Rs m 7,375 7,328 -0.6%
Profit before tax Rs m 115,422 122,519 6.1%
Tax Rs m 25,243 24,801 -1.8%
Profit after tax Rs m 90,179 97,718 8.4%
Gross profit margin % 19.8 20.2
Effective tax rate % 21.9 20.2
Net profit margin % 14.7 15.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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WIPRO Balance Sheet Analysis

  • The company's current liabilities during FY20 stood at Rs 216 billion as compared to Rs 214 billion in FY19, thereby witnessing an increase of 1.0%.
  • Long-term debt down at Rs 5 billion as compared to Rs 28 billion during FY19, a fall of 82.9%.
  • Current assets fell 9% and stood at Rs 520 billion, while fixed assets rose 22% and stood at Rs 241 billion in FY20.
  • Overall, the total assets and liabilities for FY20 stood at Rs 813 billion as against Rs 829 billion during FY19, thereby witnessing a fall of 2%.

WIPRO Balance Sheet as on March 2020

No. of Mths Year Ending 12 Mar-19* 12 Mar-20* % Change
Networth Rs m 564,226 553,217 -2.0
 
Current Liabilities Rs m 214,350 216,393 1.0
Long-term Debt Rs m 28,368 4,840 -82.9
Total Liabilities Rs m 829,248 812,789 -2.0
 
Current assets Rs m 571,906 519,851 -9.1
Fixed Assets Rs m 197,300 240,815 22.1
Total Assets Rs m 829,248 812,789 -2.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



WIPRO Cash Flow Statement Analysis

  • WIPRO's cash flow from operating activities (CFO) during FY20 stood at Rs 101 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY20 stood at Rs 34 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY20 stood at Rs -151 billion on a YoY basis.
  • Overall, net cash flows for the company during FY20 stood at Rs -14 billion from the Rs 118 billion net cash flows seen during FY19.

WIPRO Cash Flow Statement 2019-20

Particulars No. of months 12 12 % Change
Year Ending Mar-19 Mar-20
Cash Flow from Operating Activities Rs m 116,316 100,643 -13.5%
Cash Flow from Investing Activities Rs m 50,126 34,012 -32.1%
Cash Flow from Financing Activities Rs m -49,369 -150,998 -
Net Cash Flow Rs m 117,599 -14,421 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for WIPRO

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 17.1, an improvement from the EPS of Rs 14.9 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 347.8, stands at 16.2 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 2.4 times, while the price to sales ratio stands at 2.2 times.
  • The company's price to cash flow (P/CF) ratio stood at 13.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Sales per share (Unadj.) Rs 97.1 106.8
TTM Earnings per share Rs 14.9 17.1
Diluted earnings per share Rs 19.9 21.6
Price to Cash Flow x 19.1 13.3
TTM P/E ratio x 21.6 16.2
Price / Book Value ratio x 2.6 2.4
Market Cap Rs m 2,098,303 1,573,576
Dividends per share (Unadj.) Rs 1.0 1.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for WIPRO

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 2.4x during FY20, from 2.7x during FY19. The current ratio measures the company's ability to pay short-term and long-term obligations.

    Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 17.7x during FY20, from 16.7x during FY19. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

  • Profitability Ratios
  • Return on Equity (ROE): The ROE for the company improved and stood at 17.7% during FY20, from 16.0% during FY20. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

    Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 23.3% during FY20, from 20.7% during FY19. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

    Return on Assets (ROA): The ROA of the company improved and stood at 12.9% during FY20, from 11.8% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-19* 12 Mar-20*
Current ratio x 2.7 2.4
Debtors’ Days Days 63 62
Interest coverage x 16.7 17.7
Debt to equity ratio x 0.1 0.0
Return on assets % 11.8 12.9
Return on equity % 16.0 17.7
Return on capital employed % 20.7 23.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



To see how WIPRO has performed over the last 5 years, please visit here.

WIPRO Share Price Performance

Over the last one year, WIPRO share price has moved up from Rs 243.8 to Rs 347.8, registering a gain of Rs 104.0 or around 42.6%.

Meanwhile, the S&P BSE IT Index is trading at Rs 22,553.7 (down 0.5%). Over the last one year it has moved up from 15,005.8 to 22,553.7, a gain of 7,548 points (up 50.3%).

Overall, the S&P BSE SENSEX is up 14.5% over the year.

(To know more, check out historical annual results for WIPRO and quarterly results for WIPRO)

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Related Views on News

WIPRO Announces Quarterly Results (3QFY21); Net Profit Up 21.5% (Quarterly Result Update)

Jan 14, 2021 | Updated on Jan 14, 2021

For the quarter ended December 2020, WIPRO has posted a net profit of Rs 30 bn (up 21.5% YoY). Sales on the other hand came in at Rs 157 bn (up 1.3% YoY). Read on for a complete analysis of WIPRO's quarterly results.

WIPRO Announces Quarterly Results (2QFY21); Net Profit Down 3.0% (Quarterly Result Update)

Oct 14, 2020 | Updated on Oct 14, 2020

For the quarter ended September 2020, WIPRO has posted a net profit of Rs 25 bn (down 3.0% YoY). Sales on the other hand came in at Rs 151 bn (down 0.2% YoY). Read on for a complete analysis of WIPRO's quarterly results.

WIPRO 2018-19 Annual Report Analysis (Annual Result Update)

Jun 27, 2019 | Updated on Jun 27, 2019

Here's an analysis of the annual report of WIPRO for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of WIPRO. Also includes updates on the valuation of WIPRO.

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